SWAMI KESHVANAND INSTITUTE OF TECHNOLOGY,

MANAGEMENT AND GRAMOTHAN, JAIPUR

Assignment on
MANAGING BRANDS OVER TIME AND OVER
GEOGRAPHIC BOUNDARIES (UNIT- VII)

Submitted To: Submitted By:

Dr. Atul Gupt Shivani Chaudhary

Assistant Professor Roll No: 46

SKIT, JAIPUR MBA 3rd Semester

 BRAND EXTENSION

MEANING:

A brand extension is when a company uses one of its established brand names on a new product
or new product category. It's sometimes known as brand stretching.

A brand makes it possible to identify a product. It gives it a name and makes it differentiable by
assigning identifiable properties.

But once the brand gains reasonable traction and finds its position in the market, new doors open
for the company. It often uses this opportunity to launch new products under the same brand,
which borrows the similar positioning of that of the existing product, even though they belong to
different categories.

This marketing strategy is known as brand extension.

What Is Brand Extension?

Brand extension (also called brand stretching) is a marketing strategy where the company makes
use of its existing established brand name for a new product or a new product category.

This new product or product category (called a spin-off) substantially different yet logically
related to the well-known original product. This helps it to leverage the brand
equity and positioning of the existing famous brand to get initial traction.

Few key points to note here –

 A different product or category – Launching a new flavour of an existing ice-cream

brand isn’t brand extension. However, using the same brand name to launch chocolate is
considered to be one. The new product should be different from the existing one.
 Using the same name – The brand extension strategy only comes into play when the
company launches new products under the existing brand name.

 Types Of Brand Extension

Brand extension involves using an existing brand to launch and promote new products. It can be
categorized into six types –

1. Companion Product Extension

Companion products usually complement the original products. They belong to the same niche
and are generally directly related to the original products. Examples include – Colgate, a
toothpaste brand, releasing a toothbrush under the same brand name.

This is the most sought-after brand extension strategy as it also helps in sales promotion and
marketing the original product.

2. Product Form Extension

Product form extension includes launching the same product in a different form, which results in
it competing in a different product category.

Colgate started off making toothpaste, then gradually began to release new products connected to
oral care – you can now get Colgate toothbrushes and mouthwash. A product extension keeps
your brand consistent while giving you new ways to earn profits.

3. Company Expertise Extension

Company expertise extension strategy comes to play when a company extends its expertise and
its brand name to a new product. The company expert in making good sounding speakers may
extend this expertise in developing good sounding televisions as well.
While computers and phones aren’t directly related, they exist in the same category of expertise.
Samsung extended their product line with device expertise, stretching from mobile phones to
laptops, refrigerators, and more.

Sony is one such company that used brand extension to extend its company’s expertise to other
product categories.

4. Customer Franchise Extension

When a company extends its brand into different product categories focused on a single market
segment, it is called customer franchise extension. Johnson and Johnson, for example, develop
different products under the same name, which caters to the same target consumers – babies.

5. Brand Distinction Extension

Many brands are considered unique with regards to the benefits they provide or the way they
deliver the utility. Companies often use these benefits along with the existing brand name to
enter into new niches and industries. This extends the existing brand equity to the new product
launched.

An example of brand distinction extension is Gold’s Gym extending its expertise and launching
the Gold’s Gym 7-in-1 Body Building System.
 6. Brand Prestige Extension

Brand prestige extension refers to as extending the brand image to a new product when it’s
launched in a completely unrelated product category. For example, BMW, a known automobile
brand, extended its brand prestige to the products it launched in the apparel industry and
accessories (watches).

7. Extension By Transfer Of Component

Some brands are known for the components they use in their products, like Dr Scholl’s, for its
orthopedic foot care insoles. These brands often use this opportunity to leverage this element to
launch a new product under the same category. Components that are usually transferred to new
products include – flavour, ingredient, scent, color, etc.

8. Extension By Leveraging A Lifestyle

Some brands have successfully positioned themselves as a part of a particular lifestyle – they
reinforce a way of living, culture, or set of values or interests. They are known as lifestyle
brands.

These lifestyle brands are known not for a distinct benefit or component but a distinct visual
style that the customers can emotionally relate to – like luxury, rugged work ethic, or outdoor
lifestyle. They use this positioning strategy to expand their range of offerings.

Take jeep, for example, a well-known automobile brand connected with an outdoorsy lifestyle.
The company used this image as a base to extend its offerings to a range of products which
includes clothing, knives, tents, bicycles, baby strollers, etc.

9. Red Carpet Brand Extension

When a celebrity, an industry expert, or an influencer lends his name, knowledge, and expertise
to a brand to help it extend its product offerings, it is known as red carpet brand extension.
This strategy is used by the brands to expand into industries not logically related to the existing
sector they operate in, or just to borrow brand equity of a current influencer in that industry.

The Yankee shortstop, Derek Jeter, has partnered with 24 Hour Fitness to lend his brand equity
to a series of Signature Clubs named for him in select locations of the gym.

What is the Need?

A brand extension is a powerful way to grow and develop your organisation by unlocking the
untapped potential of your business.

By exploring new potential areas for relevant growth, brand extensions give companies access to
everything from better brand visibility, to boosted consumer connections and of course, more
opportunities for profit.

In fact, Nielsen suggests that brand extensions are up to 5 times more successful than new
launches. That’s because an extended brand builds upon the existing authority and reputation of
your company. The trouble is, brand extension strategies aren’t always as simple as they seem.

In theory, brand extension failures should be few and far between. After all, all you need to do is
slap your logo onto a new product, right? Well, maybe not. Historical brand flops like Colgate
TV dinners, and the Evian water-filled bra shows that there’s more art to the brand extension
strategy than you’d think.
  Brand Extension Advantages And Disadvantages

Brand extension can prove to be the best or the worst strategy undertaken by the company. It can
either increase the brand equity because of right judgment or can result in brand dilution just
because the spin-off wasn’t able to prove its relationship with the existing product. Besides these,
there are other advantages and disadvantages of brand extension –

Advantages of Brand Extension

 Increases the operating market of the brand: With the introduction of a new product
of a different category under the same brand, the brand’s operating market increases. It
makes the brand visible to a broader audience, which eventually increases its brand
equity.
 Increases the chances of accepting the brand’s new products: With increased
acquaintance with the existing brand, the willingness to try and accept its new products
also increases among the target audience, especially when the new products belong to the
same industry/niche.
 Enhances the brand image: When a new product launches with the same underlying
brand message and promise, the brand image improves, and customers start to believe in
the brand.
 Cost of developing a new brand is saved: Developing a new brand incur substantial
charges which aren’t limited to marketing and promotion. Brand extension saves such
costs and even benefits the company in cutting marketing and promotion costs as the
same communication channels that were used earlier can be used to promote both the
products.
 Makes getting initial traction easy: It is usually easier to attract the existing customers
of the brand or people who are acquainted with the brand to try the new products
launched by the company under the same brand.
 Increases the efficiency in marketing and promotion: Since the brand identity is
already set, it doesn’t involve as much effort as it would have been required if it were a
new brand.
Disadvantages of Brand Extension

 Can lead to brand dilution: Brand dilution is the weakening of the power of the brand
because of its overuse. It happens when the company uses the brand extension strategy in
almost every industry it wants to enter into without considering the logical relationship
between the existing and new products. This often confuses the customer about what the
brand stands for and what to expect from it.
 Can damage the existing brand image: If the spin-off can’t stand up to the expectations
of the target market or if its positioning strategy backfires, the existing brand image is
affected.
 BRAND REINFORCEMENT

 Definition:
The Brand Reinforcement majorly focuses on maintaining the Brand Equity by keeping the
brand alive among both the existing and new customers. This can be done through consistently
conveying the meaning of brand in terms of:

What are the products under the brand?

What are its core benefits and how it satisfies the demand?
How is the brand different from other brands?
How it enables a customer to make a strong, unique and favorable association in their minds?

Brand reinforcement includes regular monitoring of a product at all the levels of product life
cycle (viz. Introduction Stage, Growth Stage, Maturity Stage and Decline Stage) to keep a check
on the changes in the tastes and preferences of customers.

 Strategies:-
 Positive Reinforcement

Positive reinforcement means providing rewards for good behavior. This can come in
the form of bonuses or extra benefits, but positive reinforcement can involve smaller
and simpler rewards. For example, a verbal acknowledgement of a job well done can
help reinforce positive actions. Awards and trophies for outstanding employees often
encourage high-performing employees. On a more formal level, promotions and title
changes can show employees that their long-term positive behaviors can pay off
through growing with the company.

 Negative Reinforcement

Negative reinforcement is not punishment. Negative reinforcement is the withholding

of punishment. For example, if an employee has been in danger of being demoted and
improves her behavior, deciding not to demote her is negative reinforcement. The key
here is the reinforcement, the encouraging of a behavior. The manager withholds the
negative consequences as a sign that the employee has made a change in behavior.

 Punishment

Punishment is an undesirable consequence an employee receives for bad behavior. This

can involve actions like demoting the employee or suspending the employee. A
manager may put an employee on probation pending a change in behavior. In addition,
the employee may lose overtime privileges or consideration for raises.

 Extinction

Extinction is the elimination of a behavior. This type of behavior modification should

be reserved for the most damaging behaviors. When you want an immediate and
complete stop to unwanted actions, such as smoking on the job or using sexual
innuendo, offer the most severe punishment, such as firing, if you see any more of the
behavior. You should make the consequences clear and make sure employees know
there will be zero tolerance.
  Plan Ahead

Train your managers in the four types of behavior modification strategies, so they will
have a repertoire of responses at their fingertips. This will help eliminate anger and
frustration as motivators for management behavior, and replace these with level-headed
strategies designed to improve the workforce.

The marketers adopt this strategy to remind customers about the brand and its long-
lasting benefits. In order to keep the brand in the minds of the customer, several
innovations, researches, and creative marketing programs are made in line with the
changing marketing trends.

Apart from innovation and research the brand reinforcement can be done through
various marketing programs such as:

i. Advertising is one of the most common and easy tool of brand reinforcement. By
showing the ads frequently on TV, Internet, Bulletins, Billboard, Radio, etc. can make the
brand deep-rooted in the minds of the customer.

ii. Exhibition provides a vital platform to the brands where the product with any new
feature can be demonstrated to the customer. Products seen in real gives an experience to
the customer and some image gets created in their minds.

iii. Event and Sponsorship act as an aide to the brand reinforcement. The companies
sponsor big events like sports, political rallies, education, award functions, etc. with the
objective of reminding the customer about their product and creating the positive image
in the minds of new prospects.

iv. Showroom layout also plays a vital role in strengthening the brand image in the minds of
the customer. The way the brands are placed in the retail outlets or stores reminds the
customer about the product and also influences new users through its appeal.
 v. Promotion is the most frequently used tool of brand reinforcement. Several companies
adopt this strategy wherein some special offers, freebies, discounts, gift packs, etc. are
given along with the product. This is done with the intention to retain the existing
customers and attract new customers simultaneously.

Thus, each firm tries to maintain its brand position in the minds of all the prospective customers
such that the life of the product gets extended and remain in the race of competition.

BRAND REVITALIZATION

 Definition:
The Brand Revitalization is the marketing strategy adopted when the product reaches the
maturity stage of product life cycle, and profits have fallen drastically. It is an attempt to bring
the product back in the market and secure the sources of equity i.e. customers.
Example: Mountain Dew, A Pepsi product, was launched in 1969 with the tagline “Yahoo
Mountain Dew” that flourished in the market till 1990. After that the sales of mountain dew
declined due to which it was re-positioned, its packaging was changed, and the tagline was
changed to “Do the Dew”. It targeted the young males showing their audacity in performing the
adventurous sports. This led the Mountain Dew to the fifth position in the beverage industry.

Despite a good reinforcement strategy, a product has to be revitalized because of some

uncontrollable factors such as competition, the invention of new technology, change in tastes and
preferences of customers, legal requirements, etc.

i. Increased Competition in the market is one of the major reasons for the product to go
under the brand revitalization. In order to meet with the offerings and technology of
competitor, the company has to design its brand accordingly so as to sustain in the
market.
ii. The Brand Relevance plays a major role in capturing the market. The brand should be
modified in accordance with the changes in tastes and preferences of customers i.e. it
should cater the need of target market.
iii. Nowadays Globalization has become an integral part of any business. In order to meet
the different needs of different customers residing in different countries the brand has to
be revitalized accordingly.
 iv. Sometimes Mergers and Acquisitions demand the brand revitalization. When two or
more companies combine, they want the product to be designed from the scratch in a way
that it appeals to both and benefits each simultaneously.
v. Technology is something that is changing rapidly. In order to meet with the latest trend,
the companies have to adopt the new technology due to which the product can go under
complete revitalization.
vi. Some Legal Issues may force a brand to go under brand revitalization such as copyrights,
bankruptcy, etc. In such situations, the brand has to be designed accordingly, and the
branding is to be done in line with the legal requirements.

 Brand Revitalization Strategies:-

Brand revitalization is a result of creative thinking, problem-solving and urge of making

improvements. Let us now find out the different strategies which a company may adopt for
reviving itself.
 i. Product Improvisation: Any product that is leading the market today, maybe discarded
by the buyers tomorrow. Therefore, the company should continuously research and
improve product features and usage, to retain its customers.

ii. Better Packaging: If the product looks unappealing to the customer or not available in
user-friendly packaging, the chances of rejection increase.Therefore, another useful
strategy is to modify the product packaging such that it serves the customer’s demand
competently.

iii. Associating a Storyline: In the present scenario, the product or brand can be backed by a
story which relates to the public for creating an impact on the prospective customers.

iv. Changing Consumer Perception: Even an excellent product fails if the consumer
remains unaware or misperceives it or the brand. Thus, it becomes essential to develop
customer understanding of the company or the product.

v. Innovation or New Product Development: The most exciting ways of brand

revitalization is creatively inventing a new product or process. It will not only increase
the consumer base but also beat the competition in the market.

vi. Analyzing Price Point: The Company can also rework the product prices according to
its value addition, quantity purchased, features, specialization, class and level of
customization.
vii. Brand or Product Renaming: If the product or brand name seems to be unpleasant or
hurts the sentiments of any community or group of people, thus hampering the sales; it
can be revived through a name change.

viii. Transforming Distribution Channel: Some companies expand their business

extravagantly, selling to almost everyone. But, through market segmentation company
realizes that the target customers are just a handful.

Thus, revitalization of the marketing channel can aid the organization to head its efforts in the
direction of the target audience.

ix. Redefining Brand Identity: When the existing customers feel disconnected with the
brand and look forward to better options, the company can retain them through value
enhancement and better customer experience.

x. Product Differentiation: This strategy is undoubtedly beneficial in a highly competitive

market. Product differentiation is the introduction of some additional features, usage or
benefits of the product, which is not yet provided by the competitor.

It helps the brand to become one of its kinds and gain attention from the target audience.
 GLOBAL MARKETING

Marketing of products is done regularly by companies locally. But since ages, foreign products
have constantly been introduced in other markets and the sellers or modern-day term would be
marketers have tweaked, changed or revamped their strategies in order to appeal and gain
acceptance from local market.

Global marketing can be defined as “marketing on a worldwide scale, in different countries,

reconciling or taking commercial advantage of global operational differences, similarities, and
opportunities in order to meet global objectives”. Basically, when a firm sells the same products
to the global market, then it is known as Global marketing. An example would be Samsung
Galaxy S series, which is globally marketed and not customized as per the market it is being sold
in.

Many multinationals have offices abroad in various countries they cater to. Currently, with the
expansion of the internet, even small organizations can reach a global audience in a small
amount of time and little investment.

Airbnb, PepsiCo, Coca-Cola, H&M, Mad over Donuts are just a few players in Global
marketing.
 Advantages of Global Marketing:

1) Global Reach:
With the free availability of the internet, the reach of business has grown multiple-folds.
Companies like Alibaba and Amazon which operate in China have managed to reach
worldwide only with the help of internet. Ease of reach helps in building brand image to a
wide array of customers.

2) Lower Costs:
With a common messaging to be done across the globe, marketing budget reduces
significantly which helps to maintain profit margins.

3) Global Feedback:
With uniform messaging throughout the world, the feedback received is equally
important for companies and Global Marketing enables them to receive valuable
feedback and adapt and change according to customer feedback.

4) Overcoming Time constraints:

Unlike traditional marketing, where the print requires days and weeks to approve and
then distribute the end customer, in this case, the campaign reaches the customers within
a few mouse clicks reducing the time to implement. Faster implementation of marketing
campaigns means faster results and ultimately faster profits.

 Disadvantages of Global Marketing:

1) Cultural barriers:
This is a major hurdle in cross country marketing. Not every culture is suitable for the
products of the company. Crossing these cultural barriers can be cumbersome and costly
for the company and it may have to adopt certain specific rules for specific countries.
Managing them in global marketing can be challenging. For ex : McDonald’s has
customized its menu for Arabic countries without Pork while for India without beef.
Burger King and KFC have followed a similar trend.

2) Limited Audience:
Not everyone will want the product and they may not be the suitable target audience. In
those cases, the company can cater to only a limited percentage losing out on the other
chunk of customers. For ex: Most of the business persons in the US may be seen taking a
coffee to work – mostly Starbucks. While Starbucks works well over there, the same may
not be the case in African countries where although there is a presence of Starbucks it has
not been able to penetrate the usage limits like in the United States and other European
countries.

3) Political and Legal Constraints:

President Trump launched the campaign Make America Great Again due to which a lot
of international companies suffered and some had to shift their manufacturing plants back
in the US. In such cases, huge costs are to be borne by the companies.

4) Inventory management:
Huge unused stocks may pile up with company skyrocketing inventory costs. This may
happen due to over or underestimation of projections or misjudging the locality or
hurrying in launching without proper global marketing research.
 GLOBAL BRANDING

A new generation of global brands is emerging. Globalization used to mean identikit high streets,
May Day protests and a Starbucks on every corner. But with an international business suggesting
strength and stability in the fragile economic markets, global brands are no longer being seen as
dominating bogeymen.

Global branding refers to the management of a brand in different regions of the world, intending
to increase its strength and recognition in the markets in which it operates. This strategy may
also be called global branding or international branding.

Global branding involves planning how the brand wants to be perceived worldwide and how it
will position itself in each market to generate such perception.

 Global branding strategy

i. Combine consistency and flexibility in strategies

The essence of a global branding strategy is the balance between consistency and flexibility. It
seems contradictory, but it is not.

You need to have a coherent and consistent brand image in all regions you are present in order to
reinforce your position in the minds of consumers.

At the same time, you must have the flexibility to adapt strategies to the local culture without
losing your essence. The search for this balance is vital to the success of a global brand.

ii. Keep a strong and coherent brand identity

In this search for consistency, it is important to reinforce the values, the mission, and the vision
of your brand.

These are the founding elements, the pillars of branding, which sustain the brand identity.

The brand’s founding elements are non-negotiable: they need to be very solid and reinforced in
each local team to not be modified in the different areas of operation. In Spain, Japan, or the
USA, the brand must be the same.

However, having a consistent brand does not mean that identity and marketing strategies cannot
change according to each location’s culture.

If you try Coca-Cola in other countries, for example, you may feel different flavors — this is
because some components (sugar, for instance) vary according to regional ingredients and local
taste.

iii. Build a global brand plan

Strategic planning is the process that defines identity (mission, vision, and values), but it does
not stop there.

A company diagnosis also defines the goals and KPIs, action plans, and ways of monitoring and
analyzing performance.
Thinking about global branding, it is important that strategic planning remains consistent in the
whole brand’s operation. Companies should adopt a system that links global brand strategies to
the specific strategies of each country.

iv. Understand the different markets

One of the main resources for strategic planning is market research. In the case of global
branding, this study must be carried out in each location in order to determine its particularities
and define how to position the brand in different regions.

Each area has its own way of functioning. In the same sector, competition in South Africa is
different from the competition in Italy.

For example, Ford, the sales leader in several countries, has to position itself as an alternative in
Germany, where Volkswagen dominates.

v. Learn about local consumers

In market research, you also analyze the public. How big is your market? How many consumers
can you reach? What are their needs, behaviors, demands, beliefs, and expectations?

Once more, global branding demands that you do this research locally. Each local culture
influences the tastes, habits, and behaviors of consumers.

Companies must have quantitative data to size up the market and qualitative data to understand
the local public and uncover market niches.

From this knowledge, the brand understands what is important to those people and how to
deliver value to them. Each new market demands that you understand a new public and tell a
new story.

vi. Define local brand positioning

From deep market research, you can define the brand positioning in each location.

It is worth remembering: brand essence doesn’t change because it is sustained by the same
values, mission, and vision anywhere in the world.

However, a local strategy must include adequate brand positioning, considering the specifics of
each region.

Would you like an example? The attributes associated with Honda’s brand in the United States
are quality and reliability.

In Japan, where quality is intrinsic to any vehicle, Honda represents speed, youth, and energy.

vii. Find local partners

Among the obstacles surrounding global branding, we discussed the recent appreciation of local
economies.

Instead of collaborating for the growth of companies that are already global, people are turning
to small markets, stores, and artisans in their own city.

So how can brands overcome this scenario? The answer may lie in understanding the local
economy as an ally, not as an obstacle.

You can partner with local businesses such as suppliers, distributors, small partner brands,
regional events, and advertising agencies, among others.

Through this, you build a win-win relationship: the small business gets stronger, and your brand
wins the local public’s trust.

Therefore, it is necessary to define an internal communication strategy between teams from

different regions.

They need to understand the global planning guidelines and absorb the brand identity elements
that need to be preserved in any local strategy. They also need to talk to each other, share
insights, and learn from other teams.
It must not be forgotten that the brand is a single entity, and teams must collaborate to build a
stronger brand anywhere in the world.

So, it’s up to the company to provide communication channels, promote events, and hold
periodic meetings for exchanges between teams, creating a collaborative culture among them.

There is Amazon case of global branding

It’s time to look at some cases of brands that could expand around the world with a good global
branding strategy.

They maintained their brand’s strength in all markets but had to adapt their approach in each
place of operation.

AMAZON

Amazon is today the most valuable brand in the world, ahead of giants like Google and Apple.

It is the first to exceed US$ 200 billion in brand value. Therefore, we could not start talking
about any other brand.

Amazon has impressed since its first steps. Jeff Bozos was a visionary when he created an online
store in 1994, as the internet took its first steps. Over the years, the store that sold only books has
become a giant e-commerce in the United States.

In its domestic market, it consolidated a brand image associated with value, convenience, and
choice.

After becoming a leader in its country of origin, the brand has adopted an aggressive strategy to
win international markets.

The brand’s value proposal was maintained in all the markets. But Amazon looks with a
magnifying glass into each market in which it operates, intending to take the lead through
competitive pricing strategies, quick deliveries, and an extensive product portfolio.
Amazon also expands beyond retail, including cloud services, artificial intelligence, digital
streaming, and logistics. Therefore, the brand is also associated with technology and innovation.

Amazon invests heavily in countries where it wishes to operate. In Brazil, Amazon Web Services
announced an investment of $ 1 billion in the expansion of cloud computing infrastructure in the
state of Sao Paulo.

In retail, the investment is in logistics: in India, the company has built more than 60 distribution
centers and 150 delivery stations to ensure agility and service capacity.

Amazon is gradually taking its place in all the countries and sectors it enters, with heavy
investments in technology and infrastructure that local competitors cannot afford to outperform.
Amazon’s global branding, therefore, is based on competitiveness.